Meeting of July 18, 2012 – Public Input into the Development of EEOC's Strategic Enforcement Plan

Written Testimony of Deborah Eisenberg, University of Maryland School of Law

Thank you for the opportunity to participate in this roundtable about the EEOC’s Strategic Enforcement Plan. As you develop your substantive priorities and work to improve the agency’s enforcement efforts, I’d like to highlight the powerful role that the EEOC can play in reducing pay discrimination.

President Obama has made the eradication of pay discrimination against women one of his top priorities. The experience of Lilly Ledbetter and the recent decision in Wal-Mart Stores v. Dukes shows that pay discrimination is a prevalent concern among many working women. But it is a complex, often hidden, problem that cannot be addressed easily by working women on their own. I urge you to take a comprehensive and innovative approach to pay discrimination by providing public education and outreach to employers and employees, encouraging self-regulation by employers, and increasing systemic litigation efforts.

My scholarship has focused on the barriers faced by plaintiffs in equal pay cases and has explored non-litigation remedial approaches to preventing unjustified pay disparities between men and women who are performing substantially equal jobs. See Shattering the Equal Pay Act’s Glass Ceiling, 63 SMU L. REV. 17 (2010) (providing analysis of all reported appellate Equal Pay Act cases from 1963-2009 and finding that employee success rate in equal pay cases has declined over time); Money, Sex, and Sunshine: A Market-Based Approach to Pay Discrimination, 43 ARIZ. ST. L.J. 951 (2011) (arguing that the conceptual approach to pay discrimination should be comparable to executive compensation regulation, which uses pay transparency as an “outrage constraint” on unreasonable pay rates); and Wal-Mart v. Dukes: Lessons for the Legal Quest for Equal Pay, 46 NEW ENG. L. REV. 229 (2012) (analyzing the lessons that the Wal-Mart case offers for the development of more effective remedial approaches to pay discrimination).

As described in greater detail in these articles and as shown by the experiences of Lilly Ledbetter and the women who work at Wal-Mart, plaintiffs who seek to remedy pay discrimination through private litigation are typically unsuccessful. The vast majority of equal pay cases never make it to the merits stage. They are dismissed by courts on technical procedural grounds, as the Supreme Court did in the Ledbetter and Wal-Mart cases. Alternatively, federal courts are likely to dismiss EPA cases at the summary judgment stage based on an overly restrictive interpretation of substantially equal work or because of liberal acceptance of employers’ defenses to disparate pay.

Consequently, the employee success rate on appeal of federal equal pay cases was only 35% during the decade from 2000-09, down from a 55% employee success rate in the 1990s, 52% in the 1980s, and 59% in the 1970s.1 In a recent follow-up study of all published and unpublished EPA cases in the past decade from 2000-2011, I found that federal district courts granted summary judgment against equal pay claims 68% of the time (341 out of 500 cases).2 Courts have recognized that because of the “fact intensive nature” of the equal pay inquiry, “summary judgment will often be inappropriate” for equal pay claims.3 Although—in theory—summary judgment should be denied for most equal pay claims, in practice it has become the modus operandi in most pay discrimination cases.

Because of the uphill battle that private litigants face in enforcing the promise of equal pay for equal work, the EEOC can play a critical role in educating and encouraging employers to develop sound pay policies and practices that decrease internal pay inequalities among employees performing substantially equal work. This could be done through a multi-pronged approach that includes: 1) public outreach and education; 2) greater incentives for employer self-regulation through the collection of pay data and periodic, targeted compensation audits; and 3) litigation of cases involving systemic pay discrimination.

1. Public Education and Incentives for Self-Regulation

The most effective way to eradicate unjustified pay disparities, of course, is to convince employers to take proactive steps to eliminate them. The EEOC could offer guidance from human resources and organizational management experts about how employers can develop sound compensation policies with clearly defined goals, principles, performance standards, and auditing controls to eliminate unjustified pay disparities. The EEOC could sponsor workshops at which employers--especially small businesses--could receive assistance by experienced compensation consultants about how to develop and implement pay practices that will increase employee morale and productivity by correcting internal equity problems. Employers should be educated about how non-existent compensation systems, or systems that invest individual managers with excessive discretion, can give rise to pay disparities based on inadvertence, unconscious biases, and a host of other social, cognitive, or situational factors. Employers must understand that even if pay disparities among substantially equal jobs are “unintentional,” they may nevertheless violate the EPA and must be corrected to ensure equal pay for equal work.

Similarly, the EEOC can sponsor workshops or provide web-based materials for employees to educate them about how to research their “market value” for particular jobs, how to negotiate for fair wages with their employers, and how to address perceived wage inequities. Conversations about wages and money can often be “taboo” in the workplace. Providing trainings and materials to employees and employers about how to navigate these often uncomfortable conversations—before they grow into bigger problems or a lawsuit—would be helpful.

Pay discrimination is an area in which, and Justice Brandeis once said, “sunshine is the best disinfectant.” Pay transparency and annual compensation audits can correct problems before they become fodder for litigation. The Paycheck Fairness Act would have taken critical baby steps in that direction by prohibiting employer retaliation against employees who discuss their wages and authorizing the EEOC to compete a survey of pay data currently available and providing for the collective of pay information from employers. The EEOC, together with the U.S. Department of Labor could also conduct periodic payroll audits—like the DOL already does to investigate minimum wage and overtime violations—or directed investigations in industries in which data shows that the gender pay gap is the greatest to help employers identify and correct unjustified pay disparities between men and women who are performing similar jobs.

2. Impact Litigation

Of course, not all employers will heed the agency’s call for self-regulation. The EEOC’s enforcement of the EPA and Title VII in the courts can remedy egregious violations and raise consciousness among other employers about the need to examine their own payrolls for unjustified pay disparities.

The EEOC is more likely to be successful in prosecuting pay discrimination cases than private litigants. The EEOC has greater investigative power to reveal and prosecute systemic pay discrimination than individual employees. In my study of appellate EPA cases, I found that the success rate of appellate plaintiffs represented by either the DOL or EEOC was 73%,4 but private plaintiffs prevailed only 44% of the time. Of course, the EEOC can more carefully screen cases and has the legal expertise in this area that some plaintiffs’ attorneys may lack.

The EEOC can also more easily litigate systemic pay discrimination cases. Under the EPA, private litigants must file individual consent forms with the court to “opt in” to the collective action. Many employees may be reluctant to sue their employers because they fear losing their jobs. The Wal-Mart decision has raised the bar for private litigants who seek to challenge pay discrimination through a class action. The opt-in requirement, however, does not apply to enforcement actions brought by the agency on behalf of employees. 29 U.S.C. § 216(c). Employees may feel more comfortable coming forward if they have a federal agency advocating on their behalf.

Finally, the EEOC should file amicus curiae briefs in pay discrimination cases to educate judges about the proper interpretation of the EPA. For example, many courts are erroneously holding that the compared jobs in EPA cases be strictly identical in all respects. The EPA’s regulations have a more pragmatic definition of substantially equal work that permit differences in the type of work performed, so long as the overall amount and degree of skill, responsibility, and effort is substantially the same. Similarly, some courts are deferring to vague employer defenses without imposing the burden of persuasion on the employer to prove that the disparity actually resulted from one of the four specific affirmative defenses enumerated in the EPA. The EEOC can educate courts about the need that the “factor-other-than-sex” affirmative defense be job-related and consistent with business necessity.

Thank you again for this opportunity to speak with you. This testimony reflects my own opinions and beliefs based on my scholarly research and prior employment law practice experience and does not necessarily reflect the views of the University of Maryland Francis King Carey School of Law.